28 February, 2017
Trumps speech at the Congress is a long-awaited event for investors, mulling over the room for further rally in the US market. Tax reforms and government spending specifics haven’t still been released and are tingling the market sentiments. Trump speech on Tuesday will most likely straighten out these issues, helping the investors guess the trajectory of further betting.
The EUR/USD braces for the speech swinging in the range of 1.05-1.06 while the CFTC data has shown bearish pressure at a moderate pace for the Euro. The Net position declined from -46.8K to -58.3K in the week ending on 24 February. Uncertainty, surrounding Trump of him being able to live up to the market hopes forces the hedge funds retreat. This in turn flattened the Dollar and possibly made a pullback on the US stock market during the New-York session today.
Even though Le Pen, is falling behind Emmanuel Macron according to the latest polls, the US experience shows that writing off her candidacy could be too early. A union concluded when the centrist Francois Bayrou allowed Macron to enlist the support of the electorate of France democratic movement and forge ahead in the presidential race (61% vs. 39% for Le Pen). The yield on the French and German bonds continued to decline this week, albeit at a slower pace, pointing to a continued decline in the demand for risk. If a gap between Macron and right-wing party widens, then the European currency may get a boost out of this. The medium-term outlook for the Euro could improve after the Trump’s speech and in case there ´is frustration, the upturn seen on Monday can be extended further in the week.
The Oil prices crept up to the peaks of early January on the report from National Energy Administration of China. The main idea was that Oil output in the country has been curtailed. This has added optimism to market participants, who are waiting for a market rebalance. The crude oil production in China fell 7.5%, while data of the growing imports show that China took the cheap oil advantage, showing the fastest growth of imports over the last six years. It is expected that the oil consumption in the country will grow by 4.8% this year, but imports will decline, mainly due to rising prices.
Meanwhile, the commercial US stocks continue to rise, as the market expectations of price recovery creates an attractive opportunity to buy cheap Oil now and sell it more expensive later. Inventories amounted to 518.7 million barrels last week, while the number of working rigs increased to 602.
The Japanese Yen and Gold rose in price as the demand for safe haven assets continued to grow, despite the slight pause taken earlier in the week. The USD/JPY is preparing for the penetration of the 112 level while Gold crossed the level of $1,250, the first time since November 2016. Investors are increasingly sceptical in the further growth of the stock indices in the US, as the imperceptible growth of defensive assets may prompt the imminent trend of reversal or correction.
The Greenback has certainly taken all chances to become an outsider on the Forex market this week...
The Chinese stock market closed on a positive territory, posting the biggest gain since the end of November 2016...
The Australian regulator is riven by contradictions. On the one hand, the economy requires lower rates...
The Asian stock market began the week with an advance, in anticipation...
The European currency extended its fall after the ECB official, Yves Mersch, denied speculations about QE tapering, making it clear that the regulator is not yet going to change its dovish views...
Oil prices are trading in positive territory on Tuesday, after the Iranian Oil Minister...
The comments of the FED officials Erik Rosengren and Loretta Mester...
The British Pound rose above the level of 1.24 after the Bank of England decision last week...
When it comes to the EUR/USD pair, then we have a descending channel on the weekly chart...